Is Solana the “Ethereum Killer”?

Since the price has risen for several weeks in a row, Solana has always been a trending altcoin. At the time of writing, Solana was trading at approximately US$207, a surge of 11,400% from less than US$2 in January. According to data from the Cointelegraph market, Solana’s current market capitalization is about 60 billion U.S. dollars, ranking among the top 10 cryptocurrencies and sixth in Dogecoin.

One possible catalyst for this bullish momentum is funding provided by investors led by Andreessen Horowitz and Polychain in June. Solana receives US$314 million, Which will be used to further advance its technology in the field of decentralized finance (DeFi). It is worth noting that the investment took the form of buying SOL tokens instead of traditional stocks.

Another key reason for Solana’s price increase is its announcement The 4th Hackathon It is scheduled to be held on October 8. The target audience of the hackathon is developers whose projects participate in competitions to win cash prizes and seed funding opportunities. This is considered a positive move by Solana because it can help achieve wider adoption of its technology.

Therefore, as Solana progresses, experts have to compare it with similar programmable blockchains in Ethereum. Many people even think that Solana may be the killer of Ethereum, competing with Polkadot (DOT), Avalanche (AVAX) and Binance Smart Chain (BSC).

What is Solana?

Solana is a first-layer blockchain network that can implement smart contracts. Solana was founded in 2017 by Anatoly Yakovenko, a former senior engineer manager of Qualcomm, and claims to be a solution to the Bitcoin scaling problem.Bitcoin) And Ethereum (Ethereum). Two years after its establishment, Solana received an investment of US$20 million. A round of financing Led by Multicoin Capital.

Although Bitcoin is widely accepted as a form of peer-to-peer currency, on the other hand, Ethereum is a platform for almost all peer-to-peer transactions. Solana is in the same alliance with Ethereum with its smart contract capabilities and first-layer infrastructure, but it brings several other propositions.

Ethereum is still the first choice for building decentralized applications (DApps) and deploying smart contracts, but it is undeniable that it is plagued by legacy issues and it tries to improve over time. Due to the lack of scalability, users occasionally face the famously high gas fees. Although its transition to Proof of Stake (PoS) (which is estimated to reduce such fees by applying sharding chains to increase transaction throughput) has been implemented, it is expected that it will not be fully merged into the Ethereum mainnet until late 2021 Year or 2022. This is because although it has been online since December last year, the Beacon chain that will coordinate all shards is still being tested.

On the other hand, Solana has adopted the PoS structure as its consensus mechanism. However, the key innovation lies in its Proof of History (PoH) protocol. Under the PoS system, it may be difficult for the verifier to find the time sequence in the incoming transaction block. The way PoH solves this problem is to establish a historical record to verify the passage of time between two events in an encrypted manner.